Advice for a HTPC?

Hey fellas, so I've come across this term 'HTPC'. I love the idea of storing tons of media on my PC and having a sleek interface to access it from (I've experienced a bit of XBMC). Myself and my family are moving house soon and this time we won't be getting Sky TV (I'm from the UK, obviously) because it's expensive and as we all know, cable TV is evil. So, I'm thinking of turning my current entry-level gaming PC into a HTPC. I'm just after some advice on what extra hardware and software I'd need to get this started! Hoping to fill the living room with speakers and one massive TV for media awesomeness.

Thanks again, this community is awesome.

My specs; AMD A10-6800k APU, 8GB 1600MHz Kingston RAM, Gigabyte mobo, 1TB HDD & a low-quality 500W PSU that came with the case.

Well, if you want a HTPC, you want something small. Small, as in Mini-ITX small. Well, that is what many people do when they make an HTPC. You have some nice specs there already but what I am concerned about is your case and motherboard (ergo your PSU, too). If your case and motherboard aren't already that small, I would start there. 

Now, before this goes any further, we need to know a few things first.

If you have a budget, how much are you willing to spend?

Do you want to be able to play Blu-Ray, DVDs, etc?

Answering these things would help us help you.

To be honest, I'm not too fussed about having a large HTPC. Mostly because, I can't justify spending lot's of money on it just to make it smaller! Also, would going mini-ITX lose some features? As in, I want a free PCi for a wireless network card and a spare PCI-express for possible GPU wouldn't hurt. The reason I say that is because, I'll still probably use it for some light gaming. I'm not fussed by Blu-ray and I already have a DVD drive, so that's no issue.

A microATX based HTPC would be a good way to go. If you need a small case, I would check out the Silverstone ML03, it is a very good case for a HTPC. If you want to keep it simple, I would go with an APU from AMD. What games will you be playing?

You could try the Cooler Master N200. A nice mATX case that has good cooling and has the space for a bigger GPU if you should want to put one in. You can find your self a nice motherboard to go in that that will have the PCI slot for your Wireless card.

From a HTPC standpoint, I tend to find people forget about the sound system.  For me, theres nothing worse than watching a movie in the living, on an impressive 42" TV, and having poor audio.  I'm not sure if you already have speakers, amplifiers etc.  On the assumption you have a poor Motherboard and no amplifier and speakers.  I suggest a good USB DAC and then pair this up with some type of stereo monitor speakers.  

 http://www.amazon.co.uk/DacMagic-Digital-Analogue-Converter-Headphone/dp/B00FSDFF9K/ref=sr_1_1?ie=UTF8&qid=1398969380&sr=8-1&keywords=dac+magic

This setup means that there is less clutter with preamps, amps, cd players etc.  The DAC will give you clean sound away from the PC circuitry, and with good quality monitors, you can use Equalizers to tune your audio by ear if you are into that sort of thing.  The neat thing is that all you need is a 1/4" jack to 3.5mm jack cable to connect it all up.  This means, you could easily put your guest's mp3 player or phone into your speakers.

Forgot link speakers:  http://www.gak.co.uk/en/yamaha-hs5-single/81935

If I were you, I'd consider getting thise case: http://www.coolermaster.com/case/mini-itx-mini-series/mini210/